In a major diplomatic and economic development, the United States and China on Monday agreed to roll back their punitive tariffs on each other's goods for an initial 90-day period. This decision came after a marathon of negotiations in Geneva over the weekend between the leaders of both countries.
In a joint statement, it was announced that the US will temporarily lower its tariffs on Chinese goods from 145% to 30%, while China will cut its levies on American imports from 125% to 10%.
"Both sides recognise the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship,” they said.
Furthermore, the world's two largest economies also agreed to establish a mechanism to continue discussions about economic and trade relations led by Chinese Vice Premier He Lifeng and US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, it said.
It also added that these discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties. "As required, the two sides may conduct working-level consultations on relevant economic and trade issues,” it stated.
The tariff war between the US and China has disrupted supply chains, markets and slowed growth in both economies.
According to BBC, Chinese exporters have started to feel the strain. Sorbo Technology, a firm that traditionally sold half its output to the US, reported that its products are now “sat in boxes in a warehouse in China”.
Meanwhile, the US economy shrank at an annual rate of 0.3% in the first quarter, as firms struggled to adjust to the new tariff regime. However, trade tensions between the two nations were turning out to be positive for India. American buyers had started shifting to Indian suppliers.
With trade walls falling, experts caution that India’s window of opportunity could shrink quickly if Chinese exports bounce back at scale.
